Investment Matters

Company news: Australian Enhanced Income Fund, Coronado Resources and Origin Energy

Income securities sub-portfolio

This week, we sold our investment in the Australian Enhanced Income Fund in its entirety.

An opportunity arose to realise the position at an attractive premium to its previously traded price.

The fund has provided a good source of income over the past five years and a diversified exposure to hybrid securities.

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Australian Equities sub-portfolio

Coronado Resources provided a quarterly update. Weaker global economic conditions have continued to impact the price of metallurgical coal, which has had a marked impact on Coronado’s profitability and production volumes. Its position in your portfolio remains small and is one that we are actively reassessing, as discussed in our CIO update.

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Origin Energy flagged a non-cash impairment of its assets and a small provision for bad and doubtful debts. While representative of changing dynamics, it is important to note these are impairments required under accounting standards and will largely not impact cash flows. Lower oil prices have resulted in revised assumptions leading to an accounting impairment of its LNG assets and contracts, while current economic conditions have necessitated some provisioning for bad and doubtful debts in its Energy Markets division (gas and electricity retailing).